Financial Deepening in Sub-Saharan Africa : Empirical Evidence on the Role of Creditor Rights Protection and Information Sharing

Author/Editor:

Calvin A McDonald ; Liliana B Schumacher

Publication Date:

August 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper investigates the role of creditor rights and information sharing in explaining why some financial markets in sub-Saharan Africa have remained shallow. The paper finds that while financial liberalization and macroeconomic stability promote financial deepening, they are not enough. For countries with similar financial liberalization efforts, those with stronger legal institutions and information sharing have deeper financial development. This result is consistent with a growing body of research for other regions of the world. The main policy implications are that (1) creditor rights legislation should be reinforced, the law reformed, and efficient property registries established; and (2) governments should sponsor credit bureaus where private bureaus might not be commercially viable.

Series:

Working Paper No. 07/203

Subject:

English

Publication Date:

August 1, 2007

ISBN/ISSN:

9781451867671/1018-5941

Stock No:

WPIEA2007203

Format:

Paper

Pages:

25

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